Crypto ‘buy the dip’ moments to last longer this cycle: Hedge fund founder

A crypto hedge fund manager says there’s likely going to be more time for traders to take advantage of buying opportunities this cycle, following a plummet across the broader crypto market on the daily price charts.

“There will be intra-month volatility, but the pullbacks likely will be a “buy the dip” scenario for much longer than everyone expects,” Syncracy Capital co-founder Daniel Cheung said in a Dec. 9 X post.

Traders are ‘constantly looking to take profits’

Cheung said that during this cycle, traders have shifted to a “short-term” trading mentality, “constantly looking to take profits.” Over the past 24 hours, the total crypto market capitalization has dropped 5.41% to $3.44 trillion, according to CoinMarketCap data.

In a Dec. 9 post on X, crypto analysis firm Santiment highlighted that several altcoins with significant gains since October had “plummeted today.” 

Among the top 100 cryptocurrencies, the biggest 24-hour losers were Kaia (KAIA), down 31.33%; Stellar (XLM), with a 28.31% drop; and Flare (FLR), which fell 26.87%.

Santiment however said that if retail traders “react with fear” and offload their crypto too quickly, it could trigger an aggressive recovery.

“Expect a swift rebound to assets like TRX, AVAX, DOT, ICP, POL, FIL, and TIA.”

Swyftx lead analyst Pav Hundal told Cointelegraph that the broader crypto market pullback “looks like a blip,” adding:

“Traders were piling into leveraged longs before the smash. As soon as spot market liquidity melted away, they were in trouble.”

“Leveraged longs have gone through the market equivalent of an extinction event over the last 24 hours,” he added.

Over the past 24 hours, approximately $1.58 billion in long positions were liquidated across the crypto market, according to CoinGlass data.

$1.58 billion in long positions was liquidated across the crypto market over the past 24 hours. Source: CoinGlass

It is ‘extremely difficult’ to time the crypto market

Cheung said that “timing markets are extremely difficult.”

“In prior cycles, participants largely engaged in a hodl and buy the dip mentality,” he said.

Related: Bitcoin ‘spinning top’ candle targets $115K after recent 15% BTC flash crash

“The reality is timing markets are extremely difficult, and the fact that so many people believe they can call the “top” on crypto now leads me to believe crypto is due for a much longer than expected uptrend this time,” Cheung explained.

Bitfinex analysts recently said that near-term Bitcoin price dips won’t likely be as violent as last week’s 10% plunge, as selling pressure has significantly eased after Bitcoin’s first spike above six figures.

“With such a decline in realized profit and sell-side pressure, we can expect future declines to be less abrupt than the one experienced last week,” Bitfinex analysts said on Dec. 9.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.